XL Expands Product Recall Insurance – Analyst Blog

XL Capital Ltd (XL) yesterday announced that it has expanded the terms of coverage of its traditional recall policy for adulterated ingredient products. The coverage includes policyholders in the US and Canada.

Under the enhancement policy terms, the cover will be triggered by the recall of the product if it is found to contain ingredients that are subject to a recall. A verification of the product causing injury is not necessary. 

This new policy differs from the traditional recall policy which would trigger the policy cover when the insured client would prove that their product contained adulterated ingredients and that the product may cause injury when used. 

XL’s enhanced product recall policy is aimed at conserving the loss to the insured company by covering the recall, cost of replacing the recalled product, defense costs, rehabilitation costs etc.

While underwriting coverage under the enhanced product recall policy, XL would take into consideration certain factors such as the insured client’s revenue, product type and use, brand recognition and company profile, supplier relationship, past recall incidents etc.

Product tampering has become a pervasive problem. The recalls from product tampering present real risk to the retailers and manufacturers – the risk of loss of sales, reputation, supply contracts etc. Recall activity has been on the rise recently throughout the country as food safety has become a critical issue for the North American regulators.

XL’s policy enhancement aims to cover the high profile cases of food adulteration, where the product recall could not be made only on the basis of the contaminated ingredients.

XL Capital is a leading global provider of insurance, reinsurance and financial risk solutions to enterprises and insurance companies. The Bermuda-based company’s insurance products provide customized coverage for corporate risks and are divided into two categories: risk management products (global property and casualty programs for large multinational corporations) and specialty lines products (a wide variety of liability products including professional, workers’ compensation, environmental and property coverage for marine, aviation and satellite equipment.